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By AZ Advisory Team, January 25, 2010 2:07 pm

One of the biggest risks to the economic recovery and commercial real estate is rising interest rates ahead of a recovery in end demand. In the last few weeks of 2009, the 10-year Treasury yield moved up 60 basis points to 3.8 percent. This move largely reflected a capital shift toward equity markets as risk tolerance rose but also illustrates inflation concerns and volatility in the U.S. dollar. This recent rise in long-term rates may not last, as geopolitical concerns and a choppy economic recovery pattern may create a fl ight to safety, but the prospects of a jump in interest rates above and beyond the sustainable 3.5 percent to 4.0 percent range poses a risk to the housing recovery and places additional pressure on commercial real estate values.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By AZ Advisory Team, January 22, 2010 3:40 pm

Lenders Remain Cautious, but Encouraging Signs Emerge. Banks will remain the primary source of financing for commercial real estate, with the exception of apartments, which will continue to benefit from agency lending. Life insurance companies are showing renewed interest in lending, but a 2010 surge is unlikely due to capacity limitations. While traditional CMBS is not expected to become a major source of financing in the near term, the first TALF-eligible CMBS issuance was met with strong demand and paved the way for a few non-TALF deals in the weeks that followed.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By AZ Advisory Team, January 21, 2010 8:17 pm

Commercial Real Estate – Office: First-time unemployment claims fell in December to their lowest point since the onset of the financial crisis in September 2008. In addition, only 11,000 jobs were lost in November, the lightest month of cuts since the recession began. Reductions were concentrated in the manufacturing, construction and information sectors and were almost offset by growth in healthcare and the professional and business services sector. The gain in professional and businesses services hiring was driven mostly by a surge in temporary staffing, which rose for the fourth consecutive month in November after a prolonged period of contraction. This trend suggests that staffing needs at many companies have begun to increase as a leading indicator of eventual payroll hiring when companies enter an expansion mode. The recession has claimed nearly 7.2 million jobs so far, including 4.1 million positions in 2009.

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By AZ Advisory Team, January 18, 2010 10:08 am

Following four consecutive quarters of contraction, GDP expanded at an annualized rate of 2.2 percent in the third quarter of 2009, signaling a technical end to the recession. The resumption of growth marks an important turning point; however, the increase is attributable to government spending and incentives such as the “Cash for Clunkers”program and the first-time homebuyer tax credit. With only $234 billion of the $787 billion stimulus package paid out to date, government spending should support modest economic growth through most of 2010. A more vigorous, self-sustaining expansion is unlikely to gain traction until the second half of the year, when renewed business and consumer confidence will translate into increased demand, replacing the stimulus as the primary driver of economic growth.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By AZ Advisory Team, January 13, 2010 12:33 pm

Looking at a report by our commercial real estate research partner, Real Capital Analytics — it says that “Foreign interest in buying US property is high and will grow in 2010. Asian investors will provide some of the newest capital in the market, but German funds and high net worth buyers from around the globe will also be active. The increased capital from Asia that has just started to emerge will particularly benefit the West Coast whereas more traditional European investors prefer the East Coast. Potential changes to the Foreign Investment in Real Property Tax Act (FIRPTA) could remove some barriers that have discouraged foreign investment in the US. Over the past few years, just 10% of US property acquisitions have involved cross-border investors, well below the global average of 28%. A repeal of FIRPTA is unlikely, but one likely change could facilitate greater foreign investment in US REITs, yet another reason why the REIT sector looks so promising for 2010.”

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By AZ Advisory Team, January 11, 2010 4:02 pm

The troubled US commercial real estate sector has been attracting a new wave of capital from sources including US private equity firms, foreign banks and foreign investors. Although the current situation is good for opportunistic investors,  their bottom-feeding strategies can be disrupted by rising interest rates.

Nonetheless, the growing interest from investors and the deals coming out of it will bring liquidity to the market which would help the commercial real estate sector, the affected banks and the US economic recovery.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By AZ Advisory Team, January 7, 2010 9:54 pm

In a Dow Jones news report, Morgan Stanley through its team of  six analysts say that the nation’s commercial real estate troubles is a manageable problem. They predicted that commercial real estate values will remain stable this year and that the U.S. is headed for a “multi-staged” and “gradual” recovery. They also said that CRE as a whole is “only a moderate headwind for the economy,” and that property values bottomed in mid-2009.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By AZ Advisory Team, January 5, 2010 4:27 pm

We think that troubles in commercial real estate will not be that bad to bring down the economy.

Other analysts said last year that pending commercial-property bankruptcies could push the country back into recession – wreaking damage on the financial system equivalent to the subprime residential mortgage losses. We disagree to this because the  value of outstanding commercial mortgages is only a fraction of the value of outstanding residential mortgages.

Nonetheless, more losses will come over the next couple of months or years for commercial property owners and their lenders. The amount of loss and regained investments would depend on how owners, investors and lenders hold or sell their commercial properties and then make strategic acquisitions that is more aligned to their objectives, core and operational competencies as well as a good build-up timing for the coming upturn.

Commercial real estate’s decline in value is already slowing this year and we should expect it to bottom and turn around by the half of 2010.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By Alex Zylberglait, December 21, 2009 6:28 pm

Financing, pricing gap and wait for distressed sales are blocking the path for commercial real estate investors.

According to an exclusive survey produced jointly by National Real Estate Investor and my company Marcus & Millichap, buyers are preparing to forge ahead with acquisitions in 2010. Two-thirds of investors (65%) who responded to the 6th Annual Investment Survey plan to boost their investment in commercial real estate over the next 12 months. That figure is up from 56% in the third quarter and 51% a year ago. The fact that buyers are once again returning to the table is a huge vote of confidence for a commercial real estate industry that has been slammed in the past year by falling property values, occupancies and rents. Respondents to the annual survey who do plan to expand existing portfolios anticipate an average increase of 26%, up from 24% in the third quarter and 22% a year earlier.

Contact me to receive the full report.

Are you one of the 65% of investors who are looking to expand portfolios and go ahead with acquisitions on bargain commercial real estate properties in the next 12 months? Contact me in advance for me to find a good strategic acquisition for you.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

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By Alex Zylberglait, December 18, 2009 10:15 pm

Price declines in the commercial property sector around the nation are dwindling slightly according to a report by the CCIM Institute and the Real Estate Research Corporation. And that a potentially meaningful recovery is projected to in about six months, the report said.

The quarterly report noted volume increases in the office, retail, apartment, and hotel sectors on a quarter-to-quarter basis, but it is still declining overall on a 12-month trailing basis.

In its 2010 forecast, the report said that credit is projected to remain stiff, and as more loans reach its due, bank foreclosures are expected to swell.  Commercial real estate sales volume and transactions are expected to increase as more entrepreneurial and opportunistic funds will flow into the market.

Contact me if you want to explore and seize opportunities in commercial real estate across the nation as I find the best investment strategy and the best fit between investors and property assets.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.